The Register closes out it’s reporting on the rumor that Oracle was considering buying Accenture:
…spokeswoman Deborah Hillinger has since denied that an acquisition will take place, claiming: “The Accenture rumour is completely untrue. Never even considered it.”
Meanwhile, Dennis covers the many reasons why the deal wouldn’t make sense in the first place. The margin argument is always a good, quick one:
…consultants are not normally selling software solutions, but are selling the bodies and expertise needed to make the chosen solution work, the second part of this model. When you look at how that translates into revenue and profit, it quickly becomes apparent that while the implementation contract may well be 5, 6 or even 10x the software cost, the margins are much smaller per dollar spent by customers. To give you a flavor of what this means, in its latest filing, Accenture recorded operating income of 13.7%. For its part, Oracle reported operating income of 32%. As you can readily see, there is no comparison between the two companies, despite the fact Accenture has been acquiring and developing its own software for solutions outside the ‘mainstream’ of solutions that Oracle sells.
We discussed this rumor on last week’s Software Defined Talk episode as well.
The commander in chief doesn’t like to read long memos, a White House aide who asked to remain unnamed told The Huffington Post. So preferably they must be no more than a single page. They must have bullet points but not more than nine per page.
Source: “Leaks Suggest Trump’s Own Team Is Alarmed By His Conduct”
Kara Swisher has a short interview with Verizon/AOL’s Tim Armstrong on the Yahoo! buy, which is still “pending of course.” It’s hard to take any interview about a pending acquisition on super face-value (no one wants to show their hand), but there’s some good indication that Verizon followed the “we’ll sort out the strategy details post-sale” plan. Armstrong himself says they’ll be working on figuring out differentiating, and “sources” say:
Verizon has had little insight into a number of issues, including the terms of the contracts with key employees, that it will need to make plans for the future.
I like the theory that the goal is, really, just to optimize the existing business:
“The deal that we contemplated is about growing the company and did not start with synergies,” said Armstrong. “We will be walking through a pretty direct process about what is structure and then cost structure and there will be synergy, but it is not at the top of our list.”
That seems like a low-risk plan. They’d be the biggest site by eyeballs in the US, which ain’t bad.
Also, more coverage from Reuters on the “RemainCo” company of Alibaba and Yahoo! Japan, and a cameo from Rita McGrath in a Will Oremus’s piece at Slate:
“It’s a beautiful example of a company that has a lot of indispensable pieces, but they don’t add up to an indispensable whole,” says Rita McGrath, professor of management at Columbia Business School. Yahoo’s problems, she believes, stemmed from “a fundamental unwillingness to choose” what kind of company it wanted to be.
And, 451 has their report out, by Rich Karpinski and Scott Denne. Some highlights:
- “AOL generates roughly $1bn from its owned media properties – Yahoo pulls in 3.5x that amount.”
- My summary of one of their points: as mobile use grows and grows, over the next 5-10 years, there’s a window for new top-dogs to emerge and take market-share. Seems like a legit theory. 451 describes the market here as: “opportunities in telecom data as a service, a market combining digital advertising, proximity marketing and an array of big-data insight services that 451 Research forecasts will grow to a $79bn addressable opportunity by 2020”
- They’re not big on the advertising technology and networking component in Yahoo!.
- There’s some indication that Verizon’s digital business is doing well, so maybe they’re pretty good at integration acquisitions.
- There’s also details on the financials of “RemainCo.”
Rumors are HPE is looking to sell of some older software assets, Autonomy, Mercury, and Vertical. Acquisition prices from Bloomberg:
- Autonomy: $10.3bn in 2011
- Mercury: $4.5bn in 2006
- Vertica: ~$350m in 2011
It’s that bugbear cloud, James over at RedMonk, said back in June in his report on the company’s big conference:
Make no mistake – Cloud is a forcing factor for pretty much all of the issues facing incumbent enterprise suppliers today. Cloud is putting pressure on all enterprise software markets – applications, hardware, networking, security, services, software, storage etc.
That said, I’d theorize that these are all reliable businesses with reliable customer bases. Their revenue may be declining and they may not be all “SaaS-y,” but for the right price PE firms could probably do alright.
Continue reading Mature Software Is Hard: HPE Looking to Divest?
” Our announcements are always a minimum of six months ahead of the technology.”
Source: Oracle insider: We’re not walking the cloud talk
Elliott Management has a plan for Citrix. Shake out sales and marketing, sell GoTo and NetScaler, dump the dead wood, and shut down all blue-sky research.
The rest is a quick tour or other ideas for what you’d do with Citrix, other than leaving it alone.
Here’s the tiny quote:
“We thought people would rent or buy computing from us,” said Bill Hilf, the head of HP’s cloud business. “It turns out that it makes no sense for us to go head-to-head.”
I feel like there’s a lot of nuance to add that’s missing. However, analysts seem to think this direction is pretty correct.
If there is a particularly weak spot for HP, it is in better enabling companies to write their own software applications, an increasingly crucial part of corporate tech where HP does not have much of a track record.
HP not so hot on public cloud, or well positioned for developers